The a2 Milk Company Limited, together with its subsidiaries, commercializes A1 protein free branded milk and related products in Australia, New Zealand, China, other Asian countries, the United Kingdom, and the United States.
The last earnings update was 29 days ago.
More info.

The calculations below outline how an intrinsic value for
a2 Milk
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Current Discount

Current Discount Checks

For
a2 Milk
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.

a2 Milk's share price is below the future cash flow value, but not at a moderate discount (< 20%).

a2 Milk's share price is below the future cash flow value, but not at a substantial discount (< 40%).

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for
a2 Milk's
earnings,
growth
and
assets
is considered below, and whether this is a fair price.

Price based on past earnings

Are
a2 Milk's earnings available for a low price, and how does
this compare to other companies in the same industry?

High Growth Checks

a2 Milk's earnings are expected to grow by 18.3% yearly, however this is not considered high growth (20% yearly).

a2 Milk's revenue is expected to grow by 17.2% yearly, however this is not considered high growth (20% yearly).

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.

Past performance checks

We assess
a2 Milk's performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)

Has the earnings growth in the last year exceeded that of the
Food
industry? (1 check)

Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)

Is the Return on Equity (ROE) higher than 20%? (1 check)

Is the Return on Assets (ROA) above industry average? (1 check)

Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
a2 Milk
has a total score of
5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

ATM Management

Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.

CEO

JayneHrdlicka

TENURE AS CEO

0.7 years

CEO Bio

Ms. Jayne Hrdlicka, MBA, BA (Economics and Mathematics) has been Managing Director, Chief Executive Officer and Director at The a2 Milk Company Ltd since July 16, 2018. Ms. Hrdlicka served as Group Chief Executive Officer at Jetstar Airways Pty Ltd since July 2012. Ms. Hrdlicka is a senior executive with extensive experience in strategy formulation and execution, insight into customer-centricity and innovation and, importantly, an understanding of operating in a disruptive environment. Ms. Hrdlicka served as the Chief Executive Officer of Jetstar at Qantas Frequent Flyer Limited since November 2012. Ms. Hrdlicka served as Strategy Head of Qantas Group at Qantas Frequent Flyer Limited until November 2012. She served as Group Executive of Strategy and Technology at Qantas from 2010 to 2012. She served as Senior Partner at Bain & Company Sydney from 1997 to 2010, where she was focussed on consumer orientated businesses. She served as Chief Executive Officer and Transformation Director - consumer products businesses from 1991 to 1997. She worked at Arthur Young and Company (now Ernst and Young). She has been a Director of Tennis Australia Limited since January 28, 2016 and also serves as its Chairman. Ms. Hrdlicka serves as President of Tennis Australia Limited since October 23, 2017. She served as a Non-executive Director at Woolworths Limited from 2010 to 2016. She is a member of Chief Executive Women and a member of the Scotch College Council in Melbourne. She holds an MBA from Dartmouth College, New Hampshire USA and a Bachelor of Arts degree in Mathematics and Economics from the Colorado College, Colorado USA.

CEO Compensation

Insufficient data for Jayne to compare compensation growth.

Insufficient data for Jayne to establish whether their remuneration is reasonable compared to companies of similar size in .

Management Team Tenure

Average tenure of the
a2 Milk
management team in years:

1.6

Average Tenure

The average tenure for the a2 Milk management team is less than 2 years, this suggests a new team.

Management Team

Jayne Hrdlicka

TITLE

MD, CEO & Director

TENURE

0.7 yrs

Craig Louttit

TITLE

Chief Financial Officer

TENURE

4.9 yrs

Shareef Khan

TITLE

Chief Operating Officer

Jaron McVicar

TITLE

General Counsel & Company Secretary

TENURE

2.3 yrs

Susan Massasso

TITLE

Chief Marketing Officer

TENURE

5.5 yrs

Lisa Burquest

TITLE

Human Resources Director

TENURE

0.3 yrs

Andrew Clarke

TITLE

Chief Scientific Advisor to the CEO

TENURE

0.6 yrs

Blake Waltrip

TITLE

Chief Executive of USA Region

TENURE

2.8 yrs

Jane Xu

TITLE

Executive Vice President of Greater China

TENURE

1.6 yrs

Melanie Kansil

TITLE

Chief Commercial Officer

TENURE

0.1 yrs

Board of Directors Tenure

Average tenure and age of the
a2 Milk
board of directors in years:

2.8

Average Tenure

62

Average Age

The average tenure for the a2 Milk board of directors is less than 3 years, this suggests a new board.

ATM News

Simply Wall St News

Why We Like The a2 Milk Company Limited’s (NZSE:ATM) 56% Return On Capital Employed

In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business. … What is Return On Capital Employed (ROCE)? … ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business.

Is The a2 Milk Company Limited (NZSE:ATM) Undervalued After Accounting For Its Future Growth?

The a2 Milk Company Limited (NZSE:ATM) is a stock well-positioned for future growth, but many investors are wondering whether its last closing price of NZ$14.31 is based on unrealistic expectations. … What are the future expectations. … a2 Milk's extremely high growth potential in the near future is attracting investors

The a2 Milk Company Limited (NZSE:ATM): Secrets For Long Term Investors

Longstanding stocks such as The a2 Milk Company Limited has fared well over time in a volatile stock market, which is why it’s my top pick to invest in. … See our latest analysis for a2 Milk. … The a2 Milk Company Limited, together with its subsidiaries, commercializes A1 protein free branded milk and related products in Australia, New Zealand, China, other Asian countries, the United Kingdom, and the United States

The a2 Milk Company Limited (NZSE:ATM) Delivered A Better ROE Than Its Industry

To keep the lesson grounded in practicality, we'll use ROE to better understand The a2 Milk Company Limited (NZSE:ATM). … Another way to think of that is that for every NZ$1 worth of equity in the company, it was able to earn NZ$0.35. … Return on Equity = Net Profit ÷ Shareholders' Equity

What Should You Know About The a2 Milk Company Limited's (NZSE:ATM) Growth?

After The a2 Milk Company Limited's (NZSE:ATM) earnings announcement in June 2018, … it seems that analyst forecasts are fairly optimistic, … as a 37% increase in profits is expected in the upcoming year,

This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). … a2 Milk has a price to earnings ratio of 46.85, based on the last twelve months. … Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)

The a2 Milk Company Limited (NZSE:ATM): Are Analysts Bullish?

Have Insiders Been Selling The a2 Milk Company Limited (NZSE:ATM) Shares?

So we'll take a look at whether insiders have been buying or selling shares in The a2 Milk Company Limited (NZSE:ATM). … That means that an insider was selling shares at around the current price of NZ$10.75. … We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.

Calculating The Fair Value Of The a2 Milk Company Limited (NZSE:ATM)

by taking the expected future cash flows and discounting them to their present value. … Discounted Cash Flows (DCF). … If you want to learn more about discounted cash flow, the basis for my calcs can be read in detail in the Simply Wall St analysis model

The a2 Milk Company Limited (NZSE:ATM): What Are Investors Earning On Their Capital?

You need to pay attention to this because your return on investment is linked to dividends and internal investments to improve the business, which can only occur if the company is expected to produce adequate earnings with the capital that has been provided. … To understand a2 Milk’s capital returns we will look at a useful metric called return on capital employed. … This will tell us if the company is growing your capital and placing you in good stead to sell your shares at a profit

ATM Company Info

Description

The a2 Milk Company Limited, together with its subsidiaries, commercializes A1 protein free branded milk and related products in Australia, New Zealand, China, other Asian countries, the United Kingdom, and the United States. The company offers fresh milk under the a2 Milk brand; and infant formula under the a2 Platinum brand. It also provides whole milk powder and skim milk powder; a2 Platinum premium stage 4 junior milk drink; premium a2 Milk powder blended with Manuka honey; and a2 Platinum premium pregnancy milk formula. The company was formerly known as A2 Corporation Limited and changed its name to The a2 Milk Company Limited in April 2014. The a2 Milk Company Limited was founded in 2000 and is based in Auckland, New Zealand.

Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.